A Study On Network Effects And International Competition Of Standards

Because the standards'network effect will make the market value of standards increased in the course of expansion of the user base, and the trend of monopolization in the market produced by the user base which is based on the feedback effects will make the technology of large user base quickly gain significant market share. So that the market convergence in such technology standards, and ultimately they become the dominant standards on the market, resulting in the so-called "winner-take-all" effect.Now in the course of formulation and revision, developing countries is in a passive state. The most important reason is that the technology is low in developing countries. And so, many scholars suggested that the way to change this pattern is to improve technical level, and master technology initiative in the competition. But it is not easy for developing countries to catch up with developed countries in technology field. This article holds that developing countries, especially the big developing countries, in addition to raising the technological level, but also can take full advantage of its huge consumer groups - the standard user base, to participate in international competition of standards.This article first overviews international competition of standards and analyzes the well-beings in international competition of standards in different cases. Second, from the point of view of technical level and user base, the paper analyzes the international competition of standards. The model provided by this paper shows that, as there are network effects, when a country has a relatively large user base, even though its technology is not better than other countries, or even worse, but also has the opportunity to win in the international competition of standards. It is followed by an analysis of the status quo of international competition of standards and three cases that confirm the front result of the analysis. Finally, the paper put forward policy proposals based on the analysis and the actual situation, to support our country in international competition of standards and suggested some theories for China's development of the standardization.